Top Five ETFs in Singapore | Investing in ETFs in Singapore

Investment

Most of us have a general sense that we should invest at least some of our money in order for it to grow, but no one ever sits us down and teaches us exactly how to do it. If you’ve been diligently accumulating money in your savings account but are wondering if there’s something more you should be doing with it, there’s an easy solution: invest in ETFs or exchange-traded funds. In this blog, we tell you about five ETFs in Singapore that you can invest in. 

Why would you buy ETFs in Singapore?

So, you’re undoubtedly aware that you can purchase stocks or shares in corporations, right? For example, you can purchase a large number of Singtel shares in the belief that the share price will rise in the future and/or that Singtel would distribute profits to you in the form of large dividends.

Five ETFs in Singapore

SPDR STI ETF (SGX: ES3)

The whole objective of investing in ETFs is to avoid trying to manipulate the system. That is why generic stock market index-tracking ETFs remain among the most popular. As previously stated, the Straits Times Index (STI) is our very own index that tracks the 30 largest firms on the SGX and thus (indirectly) Singapore’s economy. The STI, like all other stock market indices, is diversified across industries, making it about as risk-free as stock market investing gets. You’re putting all of your eggs in 30 separate baskets. In Singapore, there are two STI ETFs available: the SPDR STI ETF and the Nikko AM STI ETF.

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US$ Lion-OCBC Securities Hang Seng Tech (SGX: HSS)

Do you want to dip your toes into the IT sector? The Lion-OCBC Securities Hang Seng Tech ETF gives you access to the Hong Kong Stock Exchange’s 30 largest technology businesses.

Does that sound right? Here are a few things you should be aware of: This ETF replicates the performance of the Hang Seng TECH Index (listed on the HKEX), which includes firms like JD.com, Sunny Optical, a camera components supplier to Huawei and Oppo, Meituan, Tencent, GIF-sharing site Kuaishou, Xiaomi, and others. It will be listed on the SGX in both SGD (SGX: HST) and USD in December 2020. (SGX: HSS).

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ETF Nikko AM STI (SGX: G3B)

The other STI ETF in Singapore, as previously stated, is the Nikko AM STI ETF. In terms of objectives, it is identical to the SPDR in that it seeks to mimic the performance of the Straits Times Index, which consists of the 30 largest businesses listed on the Singapore stock exchange. Given that it is younger and smaller than SPDR, it is astonishing that the Nikko AM STI ETF can equal the price of the more established SPDR STI ETF. The expense ratio for both ETFs is 0.3 percent.

The Nikko AM STI ETF, on the other hand, has a higher tracking error, implying that it does not replicate the STI as faithfully as the SPDR. This means it can either underperform or exceed the STI.

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ETF NikkoAM-StraitsTrading Asia Ex Japan NikkoAM-(SGX:CFA)

If you’re interested in real estate, the NikkoAM-StraitsTrading Asia ex Japan REIT ETF might be of interest to you. This ETF seeks to mimic the performance of the FTSE EPRA Nareit Asia ex-Japan REITs 10 percent Capped Index, which is essentially a basket of the best-performing Asian real estate investment products.

CapitaLand Mall, Ascendas REIT, Mapletree, Frasers, Suntec, Keppel, Parkway Life, and other Singapore REITs are among the top REITs on the NikkoAM- STC Asia REIT.

ETF Nikko AM SGD Investment Grade Corporate Bond  (SGX:MBH)

Do you like to keep things safe? The Nikko AM SGD Investment Grade Corporate Bond ETF tracks the performance of the iBoxx SGD NonSovereigns Large Cap Investment Grade Index by investing in investment-grade quasi-sovereign (partial government), Singapore, and overseas corporate bonds.

Temasek Financial (I) Limited, NTUC Income Insurance, DBS Group, OCBC, UOB, Changi Airport Group, and Manulife Financial Corporation will all be present. The expense ratio for Nikko AM SGD Investment Grade Corporate Bond ETF: 0.25 percent.

These are the five ETFs in Singapore that you can look into and start your investment journey!